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June 30, 1998

JAMES J. PAPPAS, Plaintiff,
CITY OF CALUMET CITY, a municipal corporation, Defendant.

The opinion of the court was delivered by: WILLIAMS


 Plaintiff James J. Pappas ("Pappas") brings this lawsuit against the City of Calumet, Illinois ("City"). Pappas alleges that the City violated the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. by obtaining his credit report under false pretenses. Both Pappas and the City move for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the following reasons, the court grants Pappas's motion and denies the City's motion.


 Pappas is the owner and president of Capital Towing, which is an automobile towing company located in Calumet City, Illinois. During the regular course of its business, Capital Towing accepted towing referrals from the Calumet City Police Department ("Calumet Police"). Basically, the Calumet Police used Capital Towing to enforce the City's parking ordinances. If a vehicle violated a Calumet City parking ordinance and required towing, the City referred the towing job to Capital Towing, who responded by towing the vehicle. Capital Towing did not contract with the City for these referrals, nor did the City pay Capital Towing for towing vehicles that violated the City's parking ordinances. Instead, Capital Towing collected its fees for towing vehicles directly from the vehicle owner when the owner retrieved the vehicle from Capital Towing.

 In May 1995, Calumet City Chief of Police George Vallis ("Vallis") suspected that Capital Towing was not properly maintaining the vehicles that it towed for the City. Vallis based this concern on verbal complaints he received from individuals whose vehicles Capital Towing had towed. Those individuals complained that Capital Towing had either damaged their vehicles or lost personal property they had in their vehicles. Vallis also learned that an insurance company had recently accused Pappas of fraud.

 In light of the complaints about Capital Towing and his suspicions about Pappas, Vallis told Calumet Police Sergeant O'Meara ("O'Meara") to obtain a credit report on Pappas. O'Meara requested Pappas's credit report from credit reporting agency TRW. According to TRW's records, O'Meara told TRW that he was obtaining Pappas's credit report for "employment purposes." Pappas eventually discovered that the Calumet Police had performed a credit check after he applied for a credit card and the credit bureau offered him a copy of the agencies that checked his credit rating.

 Pappas brought this lawsuit as a result of the Calumet Police's request of his credit report. Pappas alleges that the Calumet Police violated the FCRA by obtaining his credit report under false pretenses. Both Pappas and the City now move the court to enter summary judgment in their favor under Rule 56 of the Federal Rules of Civil Procedure.


 The court will render summary judgment only if the factual record shows "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Bratton v. Roadway Package Sys., Inc., 77 F.3d 168, 173 (7th Cir. 1996) (quoting Fed. R. Civ. P. 56(c)). The court will not render summary judgment if "a reasonable jury could return a verdict for the nonmoving party." Sullivan v. Cox, 78 F.3d 322, 325 (7th Cir. 1996) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986)). In ruling on a motion for summary judgment, the court views the facts in the light most favorable to the nonmoving party. Bratton, 77 F.3d at 171 (citation omitted); Sullivan, 78 F.3d at 325 (citation omitted).

 On a motion for summary judgment, the moving party "bears the initial burden of showing that no genuine issue of material fact exists." Hudson Ins. Co. v. City of Chicago Heights, 48 F.3d 234, 237 (7th Cir. 1996) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)). Since the parties filed cross-motions for summary judgment, each party assumes the role of the moving party and the nonmoving party. Therefore, if one party demonstrates that no genuine issue of material fact exists, then the burden shifts to the opposing party which "must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e); accord, NLFC, Inc. v. Devcom Mid-America, Inc., 45 F.3d 231, 234 (7th Cir. 1995) (citations omitted). Whether the City unlawfully obtained the credit report is a legal question that the court may resolve on summary judgment. See Zeller v. Samia, 758 F. Supp. 775, 781-82 (D. Mass. 1991).

 The FCRA is a consumer protection statute which requires consumer reporting agencies to "adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information." 15 U.S.C. § 1681(b). Much of the FCRA regulates the behavior of credit reporting agencies. However, "even consumer reporting agencies acting in complete good faith cannot prohibit illicit use of consumer information if users are not bound to obtain consumer reports only for permissible purposes." Hansen v. Morgan, 582 F.2d 1214, 1220 (9th Cir. 1978). Accordingly, the FCRA also extends to the conduct of parties who request credit information.

 Any person who willfully or negligently fails to comply with any requirement under the FCRA with respect to any consumer may be civilly liable to that consumer. See 15 U.S.C. §§ 1681n, 1681o, and 1681q. Consequently, if a user acquires a consumer credit report under false pretenses in violation of § 1681q, then the consumer may recover civil damages from that user. See Kennedy v. Border City Sav. & Loan Ass'n, 747 F.2d 367, 369 (6th Cir. 1984); Boothe v. TRW Credit Data, 557 F. Supp. 66, 70-71 (S.D.N.Y. 1982) (citing Hansen, 582 F.2d at 1216).

 For Pappas to prevail on his summary judgment motion, he must demonstrate that no genuine issue of material fact exists over four elements. First, Pappas must show that the Calumet Police Department is a "user" within the FCRA. Since the City admits that it is in fact a "user" under the FCRA, no genuine issue of material fact exists concerning this element. Second, Pappas must demonstrate that the credit report obtained by the Calumet Police is a "consumer report" under the FCRA. Third, Pappas must establish that the Calumet Police obtained his credit report under false pretenses. And fourth, Pappas must show that there is no dispute of fact that the Calumet Police acted willfully or negligently when it obtained his consumer report under false pretenses. The court addresses each of the disputed elements of Pappas's claim separately.


 The City first argues that the credit report it obtained about Pappas was not a "consumer report" under the FCRA. In order for the FCRA to apply, the report containing information on Pappas must have been a consumer report. The FCRA defines a consumer report as:

(1) any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for ...

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